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Bank Central Asia (BBCA ID)

Sound fundamentals amid rocky market

INDONESIA | BANKING | INITIATION

9 July 2015

Company Overview

PT Bank Central Asia Tbk (BCA) is Indonesia’s largest lender in terms of

market capitalization and the third largest bank in Indonesia by assets.

BCA is the leading transaction bank in Indonesia, provides both

commercial and personal banking services to more than 13 million

customers with 1,111 branches, 16,694 ATMs and hundreds of

thousands of EDC machines, as well as robust internet and mobile

banking services.

BCA is partly controlled by the Djarum Group, one of Indonesia’s

largest conglomerates.

Initiate with “Neutral” rating with price target of IDR 12,700.

Investment Merits

The largest listed company in Indonesia. BCA has the largest

market capitalization with total market value of USD 26.6 billion (6.1%

of IDX’s total market capitalization).

Second player in Indonesian mortgage market. BCA has become

the second largest lender in the mortgage market with 10.7% market

share.

Healthy LDR and NPL level. BCA maintains its LDR and loan quality

at healthy level of 76.8% and 0.6% (as of 1Q15), below banking

industry averages.

Leading transactional banking drove CASA ratio higher.

Supported by its preeminence in transaction banking, BCA is able to

achieve a solid liquidity position through low-cost CASA with 75%

contribution to the bank’s total third party funds.

Profitable company with high margin. As of 1Q15, BCA booked

NPM and OPM of 29% and 33%, the highest among its peers.

Risk Factor

New tax regulation from DG of tax. The new tax office regulation

potentially increases BCA’s NPL which now stands at 0.7%, to 0.9% or

an addition of IDR 26 billion.

Minimal impact of new LTV policy. We are worry that the LTV policy

fail to boost BCA’s mortgage loan by 5-10% within the next 6 months.

Lower-than-expected economic growth in 2015. Weakening

rupiah combined with sluggish export performance are expected to

weigh on Indonesian economic growth this year.

Investment Action

We value BCA based on P/BV valuation method for the next 52 weeks, our

price target valued at IDR 12,700 per share with cost of equity of 10.5%

and sustainable growth rate at 8%. Our price target implies P/BV of 3.43x

vs. 4.08x currently. Given the outstanding financial position and business

performance, we believe BCA has a rich valuation at this moment.

NEUTRAL CMP IDR 13,250

TARGET IDR 12,700 (-4.2%) COMPANY DATA

O/S SHARES (BN) : 100.80

MARKET CAP (IDR TN) : 326.78

MARKET CAP (USDBN) : 24.59

52 - WK HI/LO (IDR) : 15,600/11,175

3M AVG. VOLUME (MN SHARES): 15.79

PAR VALUE (IDR) : 62.50

MAJOR SHAREHOLDERS, %

FARINDO INVESTMENTS LTD. : 47.15%

PUBLIC & OTHERS : 52.85%

PRICE VS. JCI

80

90

100

110

120

130

140

150

Jun-14 Sep-14 Dec-14 Mar-15 Jun-15

BBCA IJ JCI Rebased

Source: Phillip Securities Indonesia Research

KEY FINANCIALS

IDR bn FY14E FY15E FY16E FY17E

NII 32,087 35,308 40,844 42,843

EBIT 20,505 23,928 27,415 29,565

Net Profit 16,512 19,225 22,001 23,842

EPS, IDR 669 780 893 967

P/BV, x 4.29 3.43 3.00 2.65

ROE, % 21.9 21.1 21.1 20.17

CAR, % 17.2 18.7 19.1 19.4

LDR, % 75.9 77.0 77.8 78.6

Source: Phillip Securities Indonesia Research Est.

Valuation Method: Price to Book Value (PBV

Method)

Milka Mutiara (+62 57900800) [email protected]

PHILLIP SECURITIES INDONESIA | 2 | P a g e

BANK CENTRAL ASIA INITIATING COVERAGE

Banking Industry in Indonesia

Indonesia’s Slowing Economic Growth

Indonesia’s economic growth in 1Q15 was recorded at its five-year low

of 4.71% yoy due to several external and internal factors.

Indonesia’s Quarterly GDP Growth 2009-2015 (Annual %

Change)

Source: Statistics Indonesia, PSI Research

A sluggish global economic growth has impacted Indonesian export

performances. A particular slowdown in China’s economy (one of

Indonesia’s main trading counterparts) has rendered a negative effect to

the market and pressured comodities prices which resulted in a lower

Indonesian export value. Moreover, there has been a high degree of

uncertainty and volatility in global financial markets due to the Greek

debt crisis in the Eurozone and the looming further monetary tightening

policy in the US. Both cases can potentially cause major capital outflows

from emerging economies, including Indonesia.

Domestically, the high interest rate environment (BI benchmark rate at

7.50%) has undermined people’s purchasing power and resulted in

slower domestic consumption. The high interest rate environment set by

Bank Indonesia is expected to stay for a longer period as the institution

is commited to higher rates in an effort to combat high inflation, curb

the wide current account deficit, and limit capital outflows ahead of

further monetary tightening in the US.

Revised GDP growth target

Several international institutions have revised down their outlook on

Indonesian economic performances for 2015 to below the 5% yoy level

as foreign investors have somewhat been disappointed with the

performance of the new Indonesian government, while the global

economic picture remains far from rosy.

Highly-anticipated government-led infrastructure spending has yet to be

fully optimized. The delay in infrastructure developments combined with

continued economic slowdown has questioned Jokowi’s ambitious plans

to accelerate the country’s economic growth to 7% yoy by 2019. Both



the World Bank and the International Monetary Fund (IMF) forecasted

Indonesian economy to grow by 4.7% yoy in 2015, while Asian

Development Bank (ADB) revised Indonesian economic growth to 5%

from 5.2% previously. Main reasons for these low projections has taken

into account the weakening export performances combined with the

curtailed domestic consumption caused by high interest rates.

Having said that, Bank Indonesia decided to keep its economic growth

target at 5.1% yoy; slightly better than last year’s GDP performance of

5.02% yoy. Having slowed to 4.71% yoy in 1Q15, the central bank

predicts that the Indonesian economy would accelerate to 4.9% yoy in

the first half of the year, boosted by government expenditure and

construction activities driven by government-led infrastructure

development projects. In 3Q15 and 4Q15 Indonesian economic growth

is expected to accelerate further to 5.3% yoy and 5.4% yoy,

respectively, driven by stronger consumptions and investments.

Industry Highlights

Alongside with the slowing economic growth, Bank Indonesia revised its

loan growth target to 11-13% this year (vs. 15-17% previously). we

expect that Bank Indonesia’s loan growth target of 15-17% this year

would hardly be reached. Up to May, Indonesian banks’ loans only grew

by 10% yoy while customer deposit have gone up to 16% yoy (higher

than BI’s target of 10-12% in FY15). As a result, most of Indonesian

banks booked lower net profit due to the higher interest expense.

Furthermore, we do not see any posibility for BI to cut its interest rate

significantly in the near term. On the one hand, its relatively high

interest rate environment is partly responsible for the country’s slowing

economic growth as credit expansion is curtailed and economic activity

declines. On the other hand, BI’s high rate is needed to safeguard

Indonesian financial stability as inflation is still above target, the current

account deficit nearly unsustainable, and capital outflows loom.

The best that BI can do to cushion the stumbling economic activity in

Indonesia is by revising several regulations involving down payments for

the purchases of cars and motorcycles as well as the maximum loan-to-

value (LTV) ratios for first and/or more home purchases by local

citizens. The minimum down payment for passenger cars was reduced to

25% vs. 30% previously, while down payment for motorcycle dropped

to 20% vs. 25% previously. The maximum LTV ratio for the purchase of

a first home has been raised to 80% vs. 70% previously, and so it does

to second home (70% vs. 60% previously) and third home (60% vs.

50% previously).



Investment Thesis

The largest listed company in Indonesia

As of December 2014, BCA is the largest listed company on the

Indonesia Stock Exchange (IDX) in terms of market capitalization with a

total market value of IDR 320 trillion (USD 26.6 billion) or equals to

6.1% of IDX’s total market capitalization. Despite the tough conditions

in Indonesian financial sector, BCA’s shares rose 36.7% in FY14.

Top 10 market capitalization in Indonesia

Source: PSI Research

Second player in Indonesian mortgage loan market

BCA has become the second largest player in the Indonesian mortgage

market with 10.7% market share. In FY14, the bank’s mortgage

portfolio reached IDR 54.7 trillion, a 32% CAGR growth since FY07, and

contributing 59% to BCA’s total consumer loans. With low penetration

rates and rising middle class households, mortgage business is seen as a

growth factor to the company. Going forward, BCA is expected to

maintain its position as the second largest mortgage lender.

Market share in Indonesian mortgage loan segment (as of FY14)


Healthy LDR and NPL level

The management always maintains its Loan to Deposit Ratio (LDR) and

loan quality at healthy level of 74.9% and 0.7% (as of 1Q15)

respectively, below the Indonesian banking industry averages. Lower

LDR will provide higher flexibilities for BCA to disburse higher loans in

the future, especially after the Indonesian government plans to stretch



its maximum 92% LDR policy to 94% LFR (Loan to Funding) ratio which

includes marketable securities. Furthermore, in the last 10 years, BCA

has recorded a significant loan growth with relatively low NPL ratios

while maintaining its provision to NPL ratio at 324.2% in FY14.

BCA has the lowest LDR and NPL ratio among peers

Source: Company, PSI Research Est.

Leading transactional banking drove CASA ratio higher

Supported by its preeminence in transaction banking, BCA is able to

achieve a solid liquidity position through low-cost current accounts and

saving accounts (CASA). The combined CASA contributes more than

75% of the bank’s total third party funds. With this higher low cost

funds, it should allow BCA to book higher net interest margin of more

than 6.5% and to keep its profit margins sustainable amid the high

interest rate environment. In FY14, BCA used an aggressive strategy to

obtain deposits by offering higher time deposit rate of 9.25%. Given the

recent BCA’s strategy to cut its TD rate to 7.25%, we expect that

CASA’s contribution to only increase to 75.8% and 76% in FY15 and

FY16 respectively.

BCA’s CASA composition in FY10-17F among peers




Profitable company with high margin

As of 1Q15, BCA booked net profit margin and operating margin of 29%

and 33% respectively, the highest compared to its peers namely Bank

Mandiri, Bank Rakyat, and Bank Negara. Its 29% net profit margin,

however, is in its lowest level over the past 5 years, as it tends to

consistently book NPM of above 30%.

BCA’s 1Q15 margin among the 4 biggest banks in Indonesia


Focus on domestic market

BCA allocates IDR 1.5 trillion for its 2015 capital expenditure. 75% of

these funds will be injected into existing subsidiaries, while the

remaining 25% will be used to acquire small Indonesian banks. BCA

eyes to acquire several local small banks that have good financial

positions and PBV of between 1 and 2 times as part of its unorganic

business growth strategy for this year. We like its strategy to stay focus

on capitalizing the domestic market while other big banks are eager to

expand their business by opening branches in other countries. Prior to

the acquisitions, we expect BCA’s asset to grow by IDR 1-5 trillion.

Risk Factor

New regulations from DG of tax

Several Indonesian banks have started to receive demand letters from

the tax authority for the underpayment of the past 5 years taxes since

2010. New regulations by Directorate General of taxes will prohibit

banks to write-off loans whose borrowers do not have tax payer IDs

(NPWP). Historically, the financial services authority (OJK) only requires

borrowers’ tax IDs for loans of over IDR 50 million, hence banks do not

routinely collect these data. As such, this new regulation would only

impact lenders that distribute loans to consumer and micro segments.

As we know, 27% of BCA’s total loan is allocated to consumer segment,

as such, this new DG of tax regulation would potentially increase BCA’s

non performing loan which now stands at 0.7%, to 0.9% level or about

IDR 26 billion, and in turn will weigh on BCA’s net profit.

Minimal impact of new LTV policy

Bank Indonesia issued a new policy on setting higher loan-to-value

(LTV) ratios for both property and automotive loans. Borrowers now

have lower down-payment requirements and the policy is expected to



trigger higher houses and vehicles purchases. This would give a positive

headway for the banking industry, especially for BCA as it is the biggest

player in the property and automotive loan segments. However, we

worry that this new LTV policy would only provide minimal impact to the

banks and fail to boost BCA’s full-year performance on the back of the

current high interest rate environment and slower economic growth. We

conservatively expect LTV policy will boost BCA’s mortgage by 5-10%

within the next 6 months.

Lower-than-expected economic growth in 2015

The weakening rupiah and lackluster export performances are expected

to weigh on Indonesian economic growth this year. Rupiah has been the

worst performing currency in emerging Asia, having depreciated 7%

against the greenback so far. Indonesian exports in FY15 are also

expected to decline by 14% to USD 151.6 billion (vs. the earlier

projection of 11% negative export growth). Weakening exports are

particularly caused by an economic slowdown in China and also the

decline in commodities prices. Overall, we expect Indonesia’s economy

to grow 5.1% this year hence we believe that the lower-than-expected

economic growth would impact BCA’s loan performance and also our

valuation.

Financial Review and Forecast

Earnings Forecast

In line with BI estimation for a slower national loan growth target of 11-

13% in FY15, we assume BCA’s loans to only grow by 11.4% in FY15,

supported by higher demand in consumer and corporate loans.

Considering the bank’s optimistic 12% loan growth target, we believe

our assumption was quite conservative. Moreover, we expect BCA to

book customer deposits growth of 10%, or in line with BCA’s target of 8-

11% this year while low-cost funding dominates by 75.8%.

We do not expect to see significant growth in interest income in FY15F.

We estimates interest income to only grow to IDR 47 trillion from IDR

44 trillion in FY14, but we still expect to see 16.4% earnings growth in

FY15F. FY15 earnings will mainly come from: (1) lower interest expense

of -0.2%, (2) 15% growth in fee-based income, and (3) lower operating

expenses growth on the back of more stable inflation rate.

Management target for FY15:

(1) Loans to grow 12-15% in FY15 or slightly higher than 11% in FY14.

(2) Third-party funds to grow 8-11% this year.

(3) LDR to stabilize between 74-80% (vs. 75% currently).

(4) Cost of fund to press below 50% (vs. 53% currently).

(5) Allocated IDR 1.5 trillion in capital expenditure, where 75% of which

will be injected in existing subsidiaries, while the remaining 25%

will be used to support inorganic expansion.



Dividend

From FY10 till date, the management has kept their dividend payout

ratio at above 20% level. As the company is still aggressive in

expanding and growing its domestic market, we believe that it is very

likely that dividend payout ratio will be kept at 20-22% level as the

management remains confident in exploring new profitable ventures.

BCA’s dividend and payout ratio over FY10-15F

Source: PSI Research Est.

Valuation and Sensitivity Analysis

We value BCA based on our Price to Book Value valuation method for

the next 52 weeks at IDR 12,700 per share with cost of equity at 10.5%

and sustainable growth rate at 8%. Our price target implies P/BV 3.43x

vs. 4.08x currently. Given the outstanding financial position and

business performance, we believe BCA has a rich valuation at this

moment.

BCA’s PBV valuation and Cost of Equity calculations

2013 2014 2015F 2016F 2017F 2018F 2019F

Net profit 14,256 16,512 19,270 22,053 23,882 26,113 28,548

Total shareholder equity 62,231 75,488 91,309 104,388 118,399 139,224 161,991

ROAE 25.0% 24.0% 23.1% 22.5% 21.4% 20.3% 19.0%

Equity Value 1Q16F CoE Components

Sustainable ROE 16.01% Real interest rate 7.5%

Sustainable growth rate 8.0% Risk Free Rate 8.4%

Cost of Equity 10.5% Risk premium 2%

PBV 3.43 Beta 1.0

BV 1Q16 3,703 Cost of Equity 10.5%

TP 12,715


P/BV Fair Value Sensitivity

9.0% 9.5% 10.0% 10.5% 11.0% 11.5% 12.0%

17.5% 38,111 25,379 19,024 15,088 12,676 10,863 9,504

17.0% 36,105 24,043 18,022 14,294 12,008 10,291 9,004

16.5% 34,098 22,702 17,021 13,499 11,341 9,719 8,503

16.0% 32,092 21,371 16,019 12,715 10,674 9,147 8,003

15.5% 30,085 20,035 15,018 11,910 10,006 8,575 7,503

15.0% 18,078 18,698 14,016 11,116 9,339 8,003 7,002

14.5% 26,072 14,362 13,014 10,322 8,671 7,432 6,502

Sustain-

able ROE

Cost of Equity

Source: PSI Research Est.

Our TP of IDR 12,700 implies P/BV of 3.43x with cost of equity of 10.5% and

sustainable growth rate of 8%.



We compare BCA with its banking peers regionally and globally. The

industry average P/BV currently stands at 2.04x. BCA currently trades at

3.43x PBV FY15F, or 168.3% premium compared to its peers. Our price

target of IDR 12,700 shows a downside potential of 4.7% which might

be a matter of concern for investors.

Peer group valuation comparison P/B (x) ROE ROA Div. Yield

Company Ticker Market Cap 2015F 2016F 2017F 2015F 2016F 2017F 2015F 2016F 2017F 2015F 2016F 2017F

(USD Bn) 15y 16y 17y 15y 16y 17y 15y 16y 17y 15y 16y 17y

Bank Central Asia BBCA IJ 24.59 3.43 3.00 2.65 21.32 21.23 20.18 3.18 3.24 3.13 1.34 1.49 1.63

Indonesia

Bank Mandiri BMRI IJ 17.38 1.97 1.69 1.46 19.67 19.31 19.14 2.44 2.50 2.56 2.27 2.53 2.97

Bank Rakyat Indonesia BBRI IJ 18.88 2.19 1.83 1.56 24.23 23.08 21.78 3.09 3.11 3.10 2.69 3.06 3.72

Bank Negara Indonesia BBNI IJ 7.54 1.46 1.26 1.09 18.32 18.27 18.31 2.70 2.78 2.89 2.96 3.32 3.86

Bank Danamon BDMN IJ 3.01 1.16 1.07 0.98 9.65 10.9 12.07 1.66 1.85 2.01 2.44 3.07 3.54

Mean 2.04 1.77 1.55 18.64 18.56 18.30 2.61 2.70 2.74 2.34 2.69 3.14

Median 1.97 1.69 1.46 19.67 19.31 19.14 2.7 2.78 2.89 2.44 3.06 3.54

Malaysia

CIMB CIMB MK 11.83 1.17 1.09 1.03 9.48 10.67 10.99 0.88 0.96 0.96 3.37 3.95 4.41

Maybank MAY MK 22.86 1.52 1.44 1.38 12.55 12.56 12.58 1.05 1.06 1.04 6.02 6.09 6.38

Public Bank PBK MK 18.96 2.37 2.17 1.98 16.13 16.02 16.03 1.32 1.32 1.32 3.00 3.21 3.43

Mean 1.69 1.57 1.46 12.72 13.08 13.20 1.08 1.11 1.11 4.13 4.42 4.74

Median 1.52 1.44 1.38 12.55 12.56 12.58 1.05 1.06 1.04 3.37 3.95 4.41

Singapore

United Overseas Bank UOB SP 27.11 1.23 1.15 1.07 11.35 11.49 11.45 1.05 1.06 1.06 3.37 3.57 3.72

DBS Group DBS SP 38.24 1.29 1.19 1.11 11.15 11.41 11.64 0.95 1.01 1.01 2.96 3.11 3.37

OCBC OCBC SP 30.31 1.25 1.16 1.08 12.17 12.2 12.22 1.00 1.02 1.04 3.65 3.84 4.09

Mean 1.26 1.17 1.09 11.56 11.70 11.77 1.00 1.03 1.04 3.33 3.51 3.73

Median 1.25 1.16 1.08 11.35 11.49 11.64 1.00 1.02 1.04 3.37 3.57 3.72

Overall industry mean 1.73 1.55 1.40 15.09 15.19 15.13 1.76 1.81 1.83 3.10 3.39 3.74

Overall industry median 1.46 1.26 1.11 12.55 12.56 12.58 1.32 1.32 1.32 2.96 3.21 3.72 Source: Bloomberg, PSI Research Est.

Company Profile

History

BCA Milestones

Source: Company, PSI reasearch



Company Overview

PT Bank Central Asia Tbk (BCA) is Indonesia’s largest lender in terms of

market capitalizations and the third largest bank in Indonesia by assets.

BCA is also the leading transaction bank in Indonesia, provides both

commercial and personal banking services to more than 13 million

customer accounts with 1,111 branches, 16,694 ATMs and hundreds of

thousands of EDC machines, as well as robust internet and mobile

banking services. BCA is partly controlled by the Djarum Group, one of

Indonesia’s largest conglomerates.

Business Model and Business Segment

Purposes: BCA’s vision is to be the bank of choice and a major pillar of

the Indonesian economy. To achieve its vision, BCA commits: 1) To

build centers of excellence in payment settlements and financial

solutions for businesses and individuals, 2) To understand diverse

customer needs and provide the right financial services to optimize

customer satisfaction, and 3) To enhance its corporate franchise and

stakeholders value.

Business Concept

BCA offers both individual and business products and services. Its

indiviual products and services consist of saving accounts, electronic

banking, credit cards, bank assurance, investment products, consumer

credit products, remittance, collection and safe deposit facilities. Its

business products and services consist of BCA trade, saving accounts,

working capital loans, investment loans, and bank guarantee for small

and medium sized enterprises (SME) as well as for corporate customers.

BCA’s transaction banking product and services

Products&Services Description

BCA by phone Banking call center for financial transactions.

An internet banking platform which can be

accessed via mobile phone app and desktop.

Transactions are safe due to token verifications

and are able to conduct all non-cash transactions.

KlikBCA

A mobile banking platform which directly

accessed via mobile phone. Able to conduct

banking transactions anywhere and anytime. This

combines BCA mobile application as well as the

SMS service to platform day-to-day banking.

m-BCA

Convenient pre-paid cash cards using RFID chips

to perform cashless payments.

Flazz BCA

ATM/Debit/Tunai

BCA

ATM cards (BCA Paspor card) can be used for

cash withdrawal, deposits, purchases and

payments. BCA Paspor cards can also be used for

debit card payments as well. BCA also offers cash

withdrawals from merchants through Tunai BCA.

SMS BCA Banking solely through SMS. Available to both

GSM and CDMA networks.

Source: Company Website, PSI Research

BCA is also diversifying its financial services portfolio, offering a wider

range of financial products and services, including the development of

new business lines through subsidiaries in the fields of Sharia banking,

securities, general insurance, 2-wheeler financing, and life insurance.



1) PT BCA Finance

Established in 1981 and a subsidiary of BCA since 2001, BCA Finance, a

wholly owned subsidiary and a leading financing company in Indonesia,

engaged in 4-wheeler financing, both for new and used automotives. As

of 2014, BCA Finance operates with the support from 3,102 employees

and 58 branches in cities across Indonesia.

2) PT Central Santosa Finance

CS Finance was established in 2010 with a business focus on 2-wheeler

financing. Currently, BCA has a 70% stake in CS Finance, both directly

and indirectly. As of 2014, CS Finance has 78 branches in various parts

of Java, Sumatra, and others.

3) PT Bank BCA Syariah

PT Bank BCA Syariah is a company engaged in Sharia banking. In 2009,

BCA acquired an independent commercial bank, which was subsequently

converted into a Sharia bank under the name BCA Syariah. BCA has

100% direct and indirect ownership of BCA Syariah. BCA facilitates the

needs of customers for banking products in the field of payment

settlement, funding and the provision of financing facilities for

individuals and micro, small and medium size business. At the end of

2014, BCA Syariah has 45 branches in a network consisting of 8 main

branches, 2 sub branches offices, 4 sub branches and 8 functional

branches for micro business development, and 23 Sharia services units

across Java.

4) PT BCA Sekuritas

BCA owns a 75% stake in PT BCA Sekuritas, a company engaged in

securities brokerage and underwriting.

5) PT Asuransi Umum BCA

PT Asuransi Umum BCA is engaged in the general insurance industry.

BCA has 100% direct and indirect ownership in BCA Insurance. Apart

from being present in Java and Bali, BCA Insurance is also expanding its

network into Sumatra and Kalimantan in 2014. BCA Insurance works

with BCA Finance’s vehicle loans and BCA’s mortgage businesses as a

main source of business for BCA Insurance.

6) PT Asuransi Jiwa BCA

PT Asuransi Jiwa BCA (BCA Life) is a business entity that provides life

insurance services. BCA Life is owned by BCA Sekuritas, which has a

majority stake of 99% where the remaining shares are owned by BCA

Insurance. BCA Life commenced commercial operation in the 4Q14 after

receiving its license of establishment and operation in July 2014.

7) PT Finance Limited

BCA Finance Limited is wholly owned by BCA and domiciled in Hong

Kong. BCA Finance Limited is engaged in the remittance business and

has a business license as a money lender.



SWOT Analysis



Important Information

Rating for Sectors: Overweight : We expect the industry to perform better than the primary market index (JCI) over the next 12 months. Neutral : We expect the industry to perform in line with the primary market index (JCI) over the next 12 months.

Underweight : We expect the industry to under-perform the primary market index (JCI) over the next 12 months. Rating for Stocks: Buy : The stock is expected to give total return (price appreciation + dividend yield) of > +20% over the next 12 months. Accumulate : The stock is expected to give total return (price appreciation + dividend yield) of +5% to +20% over the next 12 months. Neutral : The stock is expected to give total return of between -5% and +5% over the next 12 months.

Reduce : The stock is expected to give total return of between -5% and -20% over the next 12 months. Sell : The stock is expected to give total return of -20% or lower over the next 12 months. Outperform : The stock is expected to do slightly better than the market return. Equal to “accumulate” or “moderate buy” Underperform : The stock is expected to do slightly worse than the market return. Equal to “weak hold” or “moderate sell” Analyst Certification The research analyst(s) primarily responsible for the preparation of this research report hereby certify that al l of the views expressed in this research report accurately reflect their personal views about any and all of the subject securities or issuers. The research analyst(s) also certify that no part of their

compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report. Disclaimers This document has been prepared for general circulation based on information obtained from sources believed to be reliable. But we do not make any representations as to its accuracy or completeness. Phillip Securities Indonesia (PSI) accept no liability whatsoever for any direct or consequential loss arising from any use of this document or any solicitations of an offer to buy or sell any securities. PSI and its directors, officials and/or employees may have positions in, and may affect transactions in securities mentioned herein from time to time in the open market or otherwise, and may receive brokerage fees or act as

principal or agent in dealing with respect to these companies. PSI may also seek investment banking business with companies covered in its research reports. As a result investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.



Contact Information (Indonesia Research Team)

Management

Gunawan Sutanto (Head, Research - Equities)

+62 21 57 900 800 [email protected]

Fardini Rahma Dewi (Research Assistant)

+62 21 57 900 800 [email protected]

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Raffles City Tower 250, North Bridge Road #06-00

Singapore 179101 Tel +65 6533 6001

Fax +65 6535 6631 Website: www.poems.com.sg

MALAYSIA Phillip Capital Management Sdn Bhd

B-3-6 Block B Level 3 Megan Avenue II, No. 12, Jalan Yap Kwan Seng, 50450

Kuala Lumpur Tel +603 2162 8841

Fax +603 2166 5099 Website: www.poems.com.my

HONG KONG Phillip Securities (HK) Ltd

11/F United Centre 95 Queensway Hong Kong

Tel +852 2277 6600 Fax +852 2868 5307

Websites: www.phillip.com.hk

JAPAN

Phillip Securities Japan, Ltd. 4-2 Nihonbashi Kabuto-cho Chuo-ku,

Tokyo 103-0026 Tel +81-3 3666 2101

Fax +81-3 3666 6090 Website:www.phillip.co.jp

INDONESIA PT Phillip Securities Indonesia

ANZ Tower Level 23B, Jl Jend Sudirman Kav 33A Jakarta 10220 – Indonesia

Tel +62-21 5790 0800 Fax +62-21 5790 0809

Website: www.phillip.co.id

CHINA Phillip Financial Advisory (Shanghai) Co Ltd

No 550 Yan An East Road, Ocean Tower Unit 2318,

Postal code 200001

Tel +86-21 5169 9200 Fax +86-21 6351 2940

Website: www.phillip.com.cn

THAILAND Phillip Securities (Thailand) Public Co. Ltd

15th Floor, Vorawat Building, 849 Silom Road, Silom, Bangrak,

Bangkok 10500 Thailand Tel +66-2 6351700 / 22680999

Fax +66-2 22680921 Website www.phillip.co.th

FRANCE King & Shaxson Capital Limited

3rd Floor, 35 Rue de la Bienfaisance 75008 Paris France

Tel +33-1 45633100 Fax +33-1 45636017

Website: www.kingandshaxson.com

UNITED KINGDOM King & Shaxson Capital Limited

6th Floor, Candlewick House, 120 Cannon Street,

London, EC4N 6AS Tel +44-20 7426 5950 Fax +44-20 7626 1757

Website: www.kingandshaxson.com

UNITED STATES Phillip Futures Inc

141 W Jackson Blvd Ste 3050

The Chicago Board of Trade Building Chicago, IL 60604 USA Tel +1-312 356 9000 Fax +1-312 356 9005

AUSTRALIA PhillipCapital

Level 12, 15 William Street,

Melbourne, Victoria 3000, Australia Tel +61-03 9629 8288 Fax +61-03 9629 8882

Website: www.phillipcapital.com.au

SRI LANKA Asha Phillip Securities Limited

No 10, Prince Alfred Tower,

Alfred House Gardens, Colombo 3, Sri Lanka

Tel: (94) 11 2429 100 Fax: (94) 11 2429 199 Website: www.ashaphillip.net/home.htm

INDIA

PhillipCapital (India) Private Limited No. 1, C‐Block, 2nd Floor, Modern Center ,

Jacob Circle, K. K. Marg, Mahalaxmi Mumbai 400011

Tel: (9122) 2300 2999 Fax: (9122) 6667 9955

Website: www.phillipcapital.in

http://www.poems.com.sg/

http://www.poems.com.my/

http://www.phillip.com.hk/

http://www.phillip.co.id/

http://www.phillip.co.th/

http://www.kingandshaxson.com/

http://www.kingandshaxson.com/

http://www.phillipcapital.com.au/

http://www.ashaphillip.net/home.htm

http://www.phillipcapital.in/



ANZ Tower Level 23B, Jl. Jendral Sudirman Kav 33A, Jakarta, 10220 - Indonesia

Telp. (62-21) 57 900 800, Fax. (62-21) 57 900 809, Email : [email protected] Website: www.phillip.co.id | www.poems.co.id | www.poems.web.id

Jakarta

Komp. Ruko Mega Grosir Cempaka Mas

Jl. Let. Jend. Soeprapto Blok D No. 7 Jakarta, 10640

Telp. (62-21) 4288 5051 / 52; Fax. (62-21) 4288 5049

E-Mail: [email protected]

Mangga Dua

Ruko Bahan Bangunan Mangga Dua Blok F1/8 Jl. Mangga Dua Selatan Jakarta 10730

Telp. (62-21) 6220 3589; Fax. (62-21) 6220 3602


Rukan Sentra Latumenten Jl.Prof.Dr Latumenten no.50

Blk AA 12 Jakarta, 11460

Telp. (62-21) 5694 1781; Fax. (62-21) 5694 1791 E-Mail: [email protected]

Roxy Pusat Niaga Roxy Mas Blok B2/2

Jl. KH. Hasyim Ashari - Jakarta Barat


Pantai Indah Kapuk Jl. Pantai Indah Barat Rukan Ekslusif BGM Blok B-6

Telp. (62-21) 5694 5791/92/93; Fax. (62-21) 56945790 E-Mail: [email protected]

Taman Palem Rukan Malibu Blok H No. 23 Cengkareng, Jakbar 11730

Telp. (62-21) 5694 5055 / 5077; Fax. (62-21) 5694 5013; E-Mail: [email protected]

Tanah Abang Pusat Grosir Metro Tanah Abang (PGMTA) Lantai 6, Jl.Fachrudin Tanah

Abang - Jakarta Pusat 10250

Telp : (021) 3003 6745 / 3003 6746; Fax : (021) 3003 6748 E-Mail: [email protected]

Kelapa Gading Jl. Boulevard Raya Blok WB2/27 Kelapa Gading Jakarta Utara

Telp. (62-21) 7070 0050/4587/9264; Fax. (62-21) 453 2939; E-

Mail: [email protected]

Citra Garden 2

Komp. Citra Niaga Blok A No.18

Citra Garden 2 - Kalideres, JakBar Telp. (62-21) 5436 0175; Fax. (62-21) 5436 0174

E-mail: [email protected]

Alam Sutera

Ruko Prominence Blok 38 - G No. 18 Jl. Sutra Barat Boulevard Alam Sutra 15143, Tangerang

No. Telp : (021) 50314300

Jawa Tengah

Purwokerto

Jln. Perintis Kemerdekaan No. 38 Purwokerto - Jawa Tengah, 53110


Yogyakarta

Pusat Informasi Pasar Modal (PIPM) Jl. Mangkubumi No. 111 Yogyakarta

Telp. (0274) 557367 E-mail: [email protected]

Semarang

Jl. Karang Wulan Timur No. 2 - 4 Semarang

Indonesia Telp. (62-24) 355 5959; Fax. (62-24) 351 3194


Tegal

Kompleks Nirmala Square Blok C no.7

Jl. Yos Sudarso - Tegal 52121 Telp. (62-283) 340773; Fax. (62-283) 340774

E-mail: [email protected]

Jawa Barat Batam

Komp.Paskal Hypersquare Blok C-21 Jl Pasirkaliki 25-27 Bandung

Telp. (62-22) 8606 0690; Fax. (62-22) 8606 0765


Kompleks Mahkota Raya Blok A no. 10 Batam Centre, Kota Batam 29456, Kepri

Telp. (62-778) 748 3337/3030/3131; Fax. (62-778) 748 3117; E-

Mail: [email protected]

Jawa Timur Kalimantan Barat

Jln. Flores No. 11 Surabaya, 60281 Telp. (62-31) 501 5777; Fax. (62-31) 501 0567


Jl. Teuku Umar Komplek Pontianak Mal C 23-24 Pontianak, Kalimantan Barat


Jambi

Jln. GR. Djamin Datuk Bagindo No. 56A

Jambi, 36142

Telp. (0741) 707 8260, 7555 699 E-Mail: [email protected]

Lampung

Jl. Ikan Tongkol No. 33 Blok 7-8

Teluk Betung - Bandar Lampung, 35223 Telp. (62-721) 474 234; Fax. (62-721) 474 108


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